Pricing your rental reasonably, based on what it has to offer, will ensure that you Fill’er Up with the least amount of vacancy, making you the most profit – which is why we decided to be come High Heeled Landlords. Comparing the size, bedroom count, bathroom count, and other amenities of your rental property to other properties that have recently rented in the area, you can easily determine how much your rental could be worth. Find a property that is relatively similar to yours and use this as your “comparison” property.
Not every property is the same, but if you can find one that has the same approximate square footage, number of bedrooms and bathrooms you can then look at amenities and add value or subtract value from that comparison.
Amenities that Typically Add Value
Think like a tenant. If you were looking for a new place to live, what types of amenities would you be willing to pay more for? This could go either way, in some cases the tenant may not want to pay more for the amenity, however, they may choose your property over that of a competitor based on amenities available. Here is a sample list of items that people may either be willing to pay more for or, at minimum, can increase rental appeal:
- Bedroom and bathroom count
- Screened in porch
- Water or golf view
- Updated appliances
- Walk-in closet
- Energy efficient home
- Built-in shelving or custom cabinets
- Storage options – attic, basement, shed, closets
- Jacuzzi tub
- Either an attached, detached garage, or carport
- Extra off street parking or boat, trailer, or RV parking
- A fenced yard
- Dead-end street or cul-de-sac
- Security system or security lights around the exterior of the property
- Gated community
- Size of yard – sometimes a large yard can be an attractive feature for those that want privacy or it can be a deterrent for those who don’t want the maintenance.
- Swimming pool
- Outdoor kitchen
- Deck or outdoor patio
- Hot Tub
- Close to a park (if a family is your target client)
- Close to stores
- Walkable distance to shops, restaurants, or entertainment
- Close to medical facilities or hospital (for senior tenants)
- Close to recreational activities like trails, golf courses, or bike routes
Don’t forget to consider any disability features the property might have, such as:
- Extra wide doorways
- Grab bars
- Lower counter heights
- Walk-in tubs and showers
This is not an extensive list, and of course not all amenities will be appealing in all locations. Tenants in Florida or Arizona may be drawn to properties with a pool than someone in North Dakota.
Why Amenities Matter
In 2002, my husband and I purchased our first apartment complex, and I was really excited because it has several amenities that I thought brought excellent value. One that I was super stoked about was that it offered two parking spaces per unit. That’s an enormous amount of parking for the downtown location where this complex was located.
After spending one weekend after the purchase at the complex familiarizing myself with the place, I was astonished to find that there were hardly any cars in the parking lot. Thinking all the current tenants must all be out running errands, I didn’t pay it much attention. Then the city bus pulled up right in front of the complex. Out came, what I swear, was every single tenant living there.
The lesson I learned was that with the public bus stop right in front of our complex it made this complex a perfect residence for people who either didn’t have cars or didn’t drive. I totally missed this amenity of public transit because I was so excited about the other amenity of two parking spots per unit. The complex was also within a block of a convenience store, grocery store, and the public library – everything was right there.
If I wanted to charge extra per month for the extra parking spot as an amenity, I wasn’t going to get very far. On the flip side, we purchased another apartment complex further way from town with great parking options and that parking lot was always full. Read more about Amenities…
Finding Those Comparison Properties
Now that we know what to look for as far as amenities go, let’s talk a bit about how can find your comparison property information. These days there are multitudes of information at our finger tips with websites like Zillow, Trulia, Realtor.com, and tons of other websites we are on information overload. These sites can be valuable to landlords, but they can also be very misleading. Be sure to cross-check your information and use a few websites to look at your comparable properties.
Here are some sites you can look at rentals and start to make comparisons:
- Rent Jungle
- GoSection8.com (this site lists only Section 8 properties, which I’ll discuss more in another post)
Leave Some Meat on the Bone
In my house, we have a saying, “Leave some meat on the bone.” What does this mean? This is just how we remind ourselves to not charge the maximum amount of rent for a property. Think about eating ribs, if you eat every last morsel, there is nothing left for later. If we charge at the peak of the price point for your property, based on amenities and your comparisons, then there is no room for negotiations.
This reduces the likelihood of a win-win feeling as your tenants won’t feel like they’ve gotten a good deal. If they are paying top-dollar for a place, it better be the Taj Mahal because there is a level of expectation when you rent the property at the peak of the price point.
Don’t under price your property either, but price it just a tad lower than the competition. That helps you rent it faster, increases the number of potential tenants interested and leaves some meat on the bone so there is less complaining.
Bottom Line: Amenities are not a one-size-fits-all. So, look at your property and surrounding rentals before deciding if something is an amenity or not. Also, after doing your comparisons, leave some meat on the bone so you have plenty of room to negotiate on price.